Top Stocks of 2025 + Covered Calls: A Practical Plan for Passive Income and Retirement Income
End-of-year stock reviews are more than entertainment. They’re a shortcut to understanding what the market rewarded, what themes dominated, and what technical traits showed up again and again.
In 2025, the S&P 500 returned about 17%—a strong year by historical standards. But the bigger story is that the best individual stocks didn’t just beat 17%… they crushed it. And they did it while many investors were distracted by pullbacks in April and again in October/November, when fear felt bigger than it looks in hindsight.
This is also where Covered Calls become more than an “options strategy.” They become a way to stay disciplined, generate Passive Income, and steadily build Retirement Income—even while you’re waiting for a stock to finally break out.
Before we get into the winners, here’s the simple version.
Covered Calls in Plain English
A covered call means:
- You own 100 shares of a stock.
- You sell a call option on those shares.
- You collect cash (premium) up front.
In exchange, you agree to sell your shares at a specific price (the strike) if the stock rises above it by expiration.
So you’re getting paid to hold your position—turning long-term Investing into a repeatable cash-flow engine.
The “Top 10” Filter: Quality + Liquidity Matters
This list isn’t built from random penny stocks that can jump from 50 cents to $3 and still be untradeable for most investors.
The focus here is quality stocks with real liquidity—roughly 1M+ average daily volume—the kind institutions can actually trade and the kind you can realistically use for covered call income.
The Top 10 Stocks of 2025 (Quick Snapshot)
Here’s the year-end leaderboard discussed in the transcript, ranked from #10 to #1:
- #10 Agnico Eagle Mines (AEM): ~131%
- #9 Banco Bilbao Vizcaya (BBVA): ~136.9%
- #8 Lam Research (LRCX): ~140.7%
- #7 Warner Bros. Discovery (WBD): ~171.2%
- #6 (Mining stock): ~177.7%
- #5 Robinhood (HOOD): ~192.5%
- #4 Barrick (Gold/mining): ~193.6%
- #3 Micron (MU): ~217%
- #2 Seagate (STX): ~223.8%
- #1 Western Digital (WDC): ~289%
Even if you disagree with any one pick, the point stands: a handful of winners dramatically outperformed the index.
That raises a question most investors avoid:
If a few stocks drive returns… why own 500 of them?
The Diversification Myth vs. Smart Concentration
Diversification is often sold like a safety blanket: “When one thing goes down, something else goes up.”
But in many real pullbacks, it feels like everything goes down at once. That’s what makes the April slump and the fall weakness so emotionally difficult.
A different approach is concentration with discipline:
- Concentrate into a smaller set of high-quality names
- Watch them closely
- Use clear rules to manage risk
- Add an income layer (like Covered Calls) while you wait
It’s not easy. But it’s how you give yourself a chance at the kind of outperformance these top stocks delivered.
What These Winners Had in Common (The Chart Clues)
You didn’t need a crystal ball to find every one of these. You needed a repeatable checklist.
1) Respect for the 200-Day Moving Average
A big recurring trait: many of these stocks either:
- Held above the 200-day, or
- Broke above it and never looked back
When a stock is living below its 200-day for long stretches, it’s often telling you the trend is not your friend.
2) The 50-Day “Guide Rail”
Once these names got going, they frequently:
- Trended above the 50-day moving average
- Pulled back to it
- Then resumed higher
That’s a clean trend environment—exactly the kind of environment where covered calls can work smoothly.
3) Breakouts + Volume Confirmation
Several of the biggest moves followed:
- Long consolidations (bases)
- A breakout above a key level
- Strong volume “confirmation”
This matters because breakouts help you avoid buying a stock just because it “looks cheap.”
The 2025 Mega-Theme: Data Storage Was the Sneaky Winner
If you only followed AI chips, you might have missed the real shocker:
The top 3 stocks weren’t the obvious AI darlings.
They were Western Digital (WDC), Seagate (STX), and Micron (MU)—all tied to data storage and the infrastructure behind the modern internet.
Think about it:
- endless photos and videos
- constant uploads
- streaming, cloud backups, enterprise data
- AI systems producing and consuming more data than ever
All that data has to live somewhere, and data centers need both storage and power to support it. That theme powered huge earnings expectations—and stock prices followed.
Why Covered Calls Fit This Kind of Market
Now let’s connect the stock analysis to strategy.
Many of the best performers had months where they went nowhere before launching higher. That’s where investors get bored, frustrated, or shaken out.
Covered calls offer a different path:
Make Money While You Wait
If a stock chops sideways for 3–6 months, you can potentially:
- collect premium weekly or monthly
- lower your effective cost basis
- stay engaged without forcing a trade
That’s how Passive Income can support patience.
Make Money While It Goes Up
In strong uptrends, the “covered call fear” is always the same:
“But what if the stock explodes higher?”
That’s where call management matters—rolling up and out, selecting strikes intelligently, and using the approach that matches your goals. If your system targets 1–2% per week, you’re building an income machine that can contribute meaningfully to Retirement Income over time.
A Simple Covered Call Framework You Can Apply
Here’s a practical way to think about this for real-world Investing:
- Start with quality stocks (liquid, strong themes, real earnings drivers).
- Wait for structure (bases, trend shifts, reclaiming the 200-day).
- Enter with confirmation (breakout, reclaim levels, higher highs).
- Overlay Covered Calls based on stock behavior:
- more conservative when choppy
- more aggressive when extended
- more flexible when trending smoothly above the 50-day
The goal isn’t to “predict.” The goal is to stack probabilities—and get paid while you do it.
Life-Improving Tips (Use These to Trade and Invest Like a Pro)
- Only run covered calls on stocks you’re happy owning long-term.
- Avoid thinly traded names—liquidity matters for clean fills and tight spreads.
- Use the 200-day as a reality check. If a stock can’t reclaim it, reduce exposure.
- Treat the 50-day like trend health. Strong stocks often “ride” it.
- Don’t confuse “cheap” with “buyable.” Wait for the chart to prove it.
- Build a rules-based entry plan (breakout level, volume, trend confirmation).
- Decide before you sell the call: Are you okay being assigned? If not, pick a different strike.
- Track your weekly/monthly income target so you’re not guessing.
- Roll with a purpose, not panic. Rolling is strategy—not an emergency button.
- Limit position size so one trade can’t damage your long-term Retirement Income plan.
- Keep a simple journal: entry reason, call strike, premium, outcome.
- Stay theme-aware. 2025 rewarded storage/data center infrastructure—2026 may reward the next link in the chain.
FAQs
1) Do covered calls work in a strong bull market?
Yes, but you need smart strike selection and a plan for managing assignments. Covered calls can reduce upside if you sell strikes too close to the current price.
2) What kind of stocks are best for covered calls?
Liquid, high-quality stocks with consistent option volume and spreads. Many investors prefer names they’d happily own for months or years.
3) Can covered calls help with retirement income?
They can contribute by producing consistent premium income while you hold shares. Like any strategy, risk management and position sizing are essential.
4) What’s the biggest risk with covered calls?
You still carry stock downside risk, and you can cap your upside if the stock runs far above your strike.
Call to Action
If you enjoyed this breakdown and want to learn how to turn great stocks into weekly cash flow, I built a free mini-course for you:
Free Mini-Course: The 4-Step Cash Flow Blueprint
Learn how to identify quality stocks, time entries using simple chart rules, and generate Passive Income with Covered Calls—even while you wait for breakouts.
And if you want more end-of-year breakdowns like this—plus my 2026 watchlist and the traits I’m tracking—subscribe and check back for the next video/article coming soon.
Conclusion
The biggest takeaway from 2025 isn’t just that a few stocks returned 200–300%. It’s that the winners shared recognizable traits—trend shifts, key moving-average behavior, strong bases, and breakouts that rewarded discipline.
If you want a way to stay disciplined through the flat months and still participate in upside, Covered Calls can add structure to your Investing process. That structure can help turn market volatility into Passive Income, and over time, that income can become a meaningful contributor to Retirement Income.
If you’d like to learn how this works in a step-by-step way, go to the Covered Call channel here: cashflowmachine.io/ccinfo. And for personalized guidance, consider speaking with a qualified financial professional before using options strategies.
